Gameplan for Alternative Energy Investing
2009-09-23 08:23:55
What should investors in the Alternative Energy sector be doing, Pearce Hammond, Director of Institutional Research, Simmons & Co. International has some ideas;Mr. Hammond: "I think my overall advice to investors right now with this sector is number one, be cautious. This is a sector that's driven a lot on momentum and press releases, and lot of stories, and that can move the stocks every now and then, but you have to really look at the fundamentals. And so my second piece of advice is just understand companies that have a better competitive position than the others. So for example, First Solar (FSLR) has a very good competitive position in the solar business. It's a hyper-competitive sector; it's a very volatile sector. I think you're going to have a lot less risk by going into the sector via that stock than going in with a high-cost producer. And the equity is going to be moving very much like a weather vain as to how people perceive the solar sector, but cautious in not getting carried away. There are going to be some big winners in this sector over the next five and 10 years, and maybe some of the companies aren't even public yet, but they will be big winners. And so kind of a constant diligence or keeping up with what's going on in the sector is helpful too. These things change a lot. "
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Significant Oil Supply Problems to Manifest in 2011-2012
2009-08-03 17:53:32
In the most recent issue of TWST, we spoke with L. Farrell Crane of Energy Opportunities Capital Management, a portfolio management firm focusing on the Energy Sector. He talked us a little about where he feels the pressure on oil prices is going to come from, and when we're going to start seeing things getting worse going forward:Mr. Crane: In this recent economic downturn we have seen reluctance on the part of the oil producers to increase capital spending given uncertainty with respect to what they expect to receive in terms of oil prices going forward. That slowdown, again, is like stepping off the treadmill. If we doubled our spending and production fell, it is not difficult to predict what will happen to supply when spending is held constant or, worse yet, reduced. We expect that we are going to see some supply problems manifest themselves beginning in 2010 and more considerably so by 2011 and 2012. Obviously the specific timing of a supply crunch will depend on the extent to which we see an economic recovery or continued slowdown. Clearly any increase in global economic activity and a related increase in energy demand will only accelerate the timing and exacerbate the issue. I think, ultimately, the supply challenges are going to be the driving factor in oil prices going forward.For the complete Investing Strategies report, including the full interview with Mr. Crane, as well as a variety of portfolio managers from across a wide range of strategies, click here.
Recovery for Oilfield Services and Offshore Drillers ?
2009-08-03 10:08:38
Our Oil and Gas Report featured an interview with Longdley "Lenny" Zephirin Chief Executive Officer, Director of Research and Senior Analyst at The Zephirin Group, Inc. Mr. Zephirin gave us insight into the sector:"From a business perspective, fundamentally the sector is solid and, more important, we are avoiding a collapse in oil prices. Management has done a great job of scaling down, taking rig equipment out of service by either warm stacking rigs till the market improves in the short term or cold stacking rigs till oil prices and demand are showing signs of stability - avoiding a collapse of day rates."Investors should buy the more liquid names in the group, they should stay with the deepwater names and the premium companies. He would be wary of the laggers at this time. Overall, he believes that the recovery in share prices will probably be a W-curve recovery. He also recommended several companies but you will have to read those on TWITTER.
Oil and Gas Picks
2009-07-30 09:25:42
in our 7-27-09 Oil & Gas Report we spoke with Chris Pikul of Morgan Keegan & Co., Inc. and he gave us his outlook for the Sector and did have two companies he liked at this juncture:Mr. Pikul: There's a two-pronged approach here. As oil continues to provide strength to the group, I've been recommending some small cap levered companies, specifically Whiting Petroleum (WLL) and Berry Petroleum (BRY). Both companies trade at a discount to what I think their net asset value is. Largely they were beaten up due to financing concerns, but both have since repaired their balance sheets to a great extent.Follow on us on TWITTER for commentary and exclusive content
Unique play in Oil and Gas
2009-07-27 09:55:25
As part of our Oil & Gas E&P Report we spoke with Philip J. McPherson of Global Hunter Securities, LLC and he gave us his Outlook for OIL & GAS E&P and a unique play in the E&P market:"When I look at the future and I look at the energy space, I still think its one of the best places to be in the long term and whether you want to believe in it because of the inflationary trade or the weak dollar, I just go back to the fundamentals of the amount of people who are increasing their energy consumption."Unique play in Oil and Gas - Evolution Petroleum (EPM)
"Evolution Petroleum has a unique play in that they have a big partner in Denbury Resources developing a large oil field in Louisiana. The amount of oil in this project, assuming a $60 oil deck, is worth approximately $5 or $6 per share and currently the company is trading at $2.50 a share so I think youve got an easy double there just as an NAV play."2009 is a year when E&P companies are not getting paid to grow so maintaining a strong balance sheet and maintaining production rather than growing is actually being rewarded, more than growing simply for the sake of growth.